Tuesday, October 31, 2006

“QUOTE LOW MAKE DOUGH$”

“CRUNCH VENDORS”
“STITCH A DEAL”
REAL ESTATE CODE ……..
…………….CHANGES THE RULES
Toop&Toop backs the latest REAL ESTATE INSTITUTE OF SA (REISA) initiative in launching its new industry wide code. Toop&Toop undertake to continue to train our team and move EVERYONE to a more modern way of thinking and operating. To achieve change, we call on the media and community to reinforce their desire for the changes as outlined in the REAL ESTATE CODE.
Monday’s launch of the “Real Estate Code” has far reaching ramifications for our industry. If the community thought the end of dummy bids was big, it does not compare with the ramifications of the new requirements of THE REAL ESTATE CODE.
The CODE addresses head on the issue of bait pricing. Bait pricing occurs at both ends of a transaction.
At listing time it has been the industry norm to impress potential home sellers with promises of amazing prices.
It has been a universal industry approach in obtaining a listing to over state an expected sale price. Why has the practice existed? Simple, the owner of a property rewards (with their house listing) the agent who states their property is worth the highest price. Over quoting is interpreted by a naive home seller as an indicator of the confidence that that agent has in their property.
The irony is nothing could be further from reality. Little do they understand that this practice invariably has the reverse effect. Almost without exception an overpriced home sells many weeks later than it should, and for many multiples of $ thousands less than what could have been achieved early in the sale campaign.
Inflating the expectations of a home seller has evolved into an auction like event. An auction conducted by a vendor with agents bidding to “buy their new clients favour”.
In my view, an owner of a property has the right to ask whatever price they choose BUT, it is not ok to do this as a consequence of intentional misquoting and agents simply bidding up expectations simply to please a potential new client.
The second relates to the disgusting old real estate adage, “Quote low, make $dough”. This practice involves quoting very low to buyers followed up by “crunching vendors” to “stitch a deal”, at the time of an offer. This nasty feature of traditional real estate practice still exists today.
It works like this. The buyer is baited with a low price. The agent gets the “fish hooked”, and once the buyer is in an emotional state these agents then either “crunch” the purchaser up, or “crunch” vendor down. Often both occurs. Everyone looses, and all parties feel emotionally exhausted.
This MUST be a move by the entire industry or the “good guy will loose, and consumers will continue to be subjected to these practices.
So, bring on the code. Bring on transparency. Bring on way overdue changes to our traditional agency business.
A copy of the code of conduct is available on line at reisa.com.au
Anthony Toop
PS. How about this gem…… a saying still taught in some offices “pitch it low, watch it grow, feed it high watch it die”.


Anthony Toop, Managing Director.


www.toop.com.au


© Toop Real Estate Group

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